#### Answer Description

Annualized Loss Expectancy (ALE) is an estimate of the average monetary value lost per year. In this case it can be calculated by finding the total loss of all records: 250 * 350 = $87,500. This gives us the Single Loss Expectancy (SLE) of the entire database. Take the SLE divided by the Annualized Rate of Occurrence (ARO) of 8%: 87,500 * .08, which gives us the ALE of $7,000.

#### Wikipedia

The annualized loss expectancy (ALE) is the product of the annual rate of occurrence (ARO) and the single loss expectancy (SLE) It is mathematically expressed as: ALE = ARO × SLE {\displaystyle {\text{ALE}}={\text{ARO}}\times {\text{SLE}}} Suppose that an asset is valued at $100,000, and the Exposure Factor (EF) for this asset is 25% The single loss expectancy (SLE) then, is 25% * $100,000, or $25,000 The annualized loss expectancy is the product of the annual rate of occurrence (ARO) and the single loss expectancy ALE = ARO * SLE For an annual rate of occurrence of one, the annualized loss expectancy is 1 * $25,000, or $25,000

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